Social partners reach agreement on the reform of labour relations

On 25 June 2008, the Portuguese government finally reached agreement on the reform of labour relations, at the Standing Commission for Social Concertation, together with representatives from all the employers’ confederations and the trade union confederation UGT. However, the other trade union confederation, CGTP, which is the largest in Portugal, did not sign the agreement. On 26 June 2008, the Council of Ministers approved the draft bill on the labour code, which will be presented at parliament and assessed in a plenary session in September2008.

Background to the agreement

  1. revision of the Labour Code was one of the promises made by the Socialist Party in their electoral campaign of 2005. The 2003 Labour Code was the product of a centre-right government coalition – the Socialist Party voted in the parliament against the Labour Code (Law 99/2003) (PT0305101N), and against its subsequent regulations (draft bill nº 109/IX)(PT0501202F).
  2. once in power, the socialist government started the process of revision, by inviting experts to produce an analysis of Portuguese employment relations, the results of which were published in April 2006 in the Green Paper on Labour Relations (Livro Verde sobre as Relações Laborais) (PT0606019I). Subsequently, in December 2007, the White Paper on Labour Relations (Livro Branco das Relações Laborais) (PT0802029I) was published, which made specific recommendations on the reform of labour relations. The social partners’s vehement reaction to the first draft of the White Paper (PT0706059I) as well as to the final draft (PT0802039I) recommendations suggested that agreement was unlikely between employers, trade unions and government.

Eight months after the White Paper on Labour Relations was published, two months after the Minister of Labour and Solidarity presented to the social partners its ‘Proposals for a new consensus on the regulation of labour relations system, social protection and employment’(PT0805019I), and 20 days after the first round of negotiations was closed, on 24 June 2008, the government came back to the social partners with a final proposal for an agreement on the reform of labour relations (Proposta de Acordo Tripartido para um Novo Sistema de Regulação das Relações Laborais, das Políticas de Emprego e da Protecção Social em Portugal).

Social partners’ views

On 25 June 2008, the day after it presented its final proposal, the government reached an agreement on the reform of labour relations at the Standing Commission for Social Concertation (Comissão Permanente de Concertação Social, CPCS), with all the employers’ confederations and the General Workers’ Union (União Geral de Trabalhadores, UGT). The other trade union confederation, the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP), which is the largest in Portugal, did not sign the agreement. On 26 June 2008, the Council of Ministers approved the draft bill on revision of the Labour Code.

Employer confederations expressed in general their satisfaction with the agreement but nevertheless they were very clear in stating that it did not match their main demands.

The president of the Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP) (CIP), Francisco van Zeller, stated that the proposed revision of the Labour Code ‘is not sufficient to meet the needs of employers, particularly in what concerns redundancies (individual and collective), but that the possibility of enlarging the areas of collective bargaining and the forms of adaptability is positive’. The president of CIP stressed: ‘This was the agreement that was possible’

The president of the Confederation of Portuguese Tourism (Confederação do Turismo Português, CTP), José Carlos Pinto Coelho, stated that the final proposal submitted by the government did not make ‘significant changes’ to the original proposal, but that ultimately the confederation accepted it because ‘it recognised the importance of the tourism sector’, and also because the government promised that ‘in the future there will be new specific legislation for the tourism sector’. Furthermore, CTP president stressed that ‘we did not get what we wanted in relation to short term contracts, but this was offset by the working time flexibility achieved, although not as far as we would like’.

The president of the Portuguese Trade and Services Confederation (Confederação do Comércio e Serviços de Portugal, CCP), José António Silva, said in turn that the agreement ‘changes something, but it will not solve all the problems of the country. This is not the best time for this revision of labour legislation, because the country is experiencing great difficulties, but I am satisfied with the agreement reached because there was a great deal of concertation’.The president of the Confederation of Portuguese Farmers (Confederação dos Agricultores Portugueses, CAP), João Machado, welcomed the fact that the legislative revision will allow exceptional contractual situations for the agricultural sector. Thus, when the new legislation comes into force, on January 2009, the farmers will be able to hire, legally, workers for periods of less than 60 days, ‘making a small discount for social security’. The president of CAP highlighted ‘...we find it a good agreement, though it has not met our wishes, but this is what negotiation is about’.

João Proença, the secretary-general of only trade union confederation that signed the agreement, UGT, expressed more enthusiasm about the agreement than the employer confederations. João Proença considered that this is a ‘good agreement’ that resulted from ‘a process of hard bargaining’. He added: ‘For UGT there are in society today special circumstances which justify a revision of the Labour Code and this review meets three main demands of UGT: the fight against insecurity, the strengthening of collective bargaining, and the fight for decent work.’

The trade union confederation CGTP left the CPCS meeting where the agreement was concluded, before its end, in protest. According to the secretary-general of CGTP, Manuel Carvalho da Silva, ‘CGTP did not participate in the meeting for justifiable reasons, as the government's latest proposal, a document with 33 pages, was sent only one day before the meeting and we needed time to examine it’. Manuel Carvalho da Silva further argued that ‘the government's latest proposal proposes the merger of the text of the Labour Code (composed of 689 articles) and its regulations (499 articles), which lead to new interpretations of the law whose effects are impossible to understand before we know the final text’. To demonstrate that the document of the government is complex and takes much time to analyse and interpret the secretary-general of CGTP stressed that ‘I would give a prize to any member of the parliament who can interpret the document in a few months’. According to the secretary-general of CGTP, the agreement on the revision of the Labour Code is a sham, creating the expectation of improvements in the economy, while in reality worsening workers’ conditions.

The agreement concluded on 25 June 2008 closed the chapter of tripartite negotiations launched by the socialist government on the reform of labour relations. During this process, the major demonstration organised by CGTP on 5 June 2008 against the government proposals showed that a large part of Portuguese workers and trade unionists do not identify themselves with the proposed ongoing reform, and are in favour of a Labour Code revision capable of promoting further labour market security and improving collective bargaining rights (PT0806049I). After the public discussion of the draft bill during July, and the summer holidays, the plenary session of the parliament will discuss the draft bill in September. An explanation of the agreement’s main outcomes will be presented in a future information update.

Maria da Paz Campos Lima, Dinâmia

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